Business Ethics Concepts & Cases .Business Ethics Concepts & Cases

1. Business Ethics
Concepts & Cases
Ethical Principles in Business

2. Utilitarianism
• Actions and policies should be evaluated on the basis of the benefits and
costs they will impose on society.
• • The only morally right action in any situation is that whose utility is
greatest by comparison to the utility of all the other alternatives .
• • Leading utilitarian theorists:
• Jeremy Bentham
• John Stuart Mill

3. How to Apply Utilitarian Principle
• First, determine what alternative actions or policies are available to me in that
situation.
• Second, for each alternative action, estimate the direct and indirect benefits and
costs that the action will probably produce for all persons affected.
• Third, for each action, subtract the costs from the benefits to determine the net
utility of each action.
• Fourth, the action that produces the greatest sum total of utility must be chosen as
the ethically appropriate course of action.

4. Criticisms of Utilitarianism
• Critics say not all values can be measured.
Utilitarians respond that monetary or other commonsense measures can measure
everything.
• Critics say utilitarianism fails with rights and justice.
Utilitarians respond that rule-utilitarianism can deal with rights and justice.

5. The Concept of a Right
• Right = an individual’s entitlement to something.
• Legal right = An entitlement that derives from a legal system that permits or
empowers a person to act in a specified way or that requires others to act in
certain ways toward that person.
• Moral (or human) rights = rights that all human beings everywhere possess to an
equal extent simply by virtue of being human beings.
• Legal rights confer entitlements only where the particular legal system is in force.
• Moral rights confer entitlements to all persons regardless of their legal system.

6. Moral Rights
• Can be violated even when “no one is hurt”.
• Are correlated with duties others have toward the person with the right.
• Provide individuals with autonomy and equality in the free pursuit of their interests.
• Provide a basis for justifying one’s actions and for invoking the protection or aid of
others.
• Focus on securing the interests of the individual unlike utilitarian standards which focus
on securing the aggregate utility of everyone in society.

7. Three Kinds of Moral Rights
• Negative rights require others leave us alone.
• Positive rights require others help us.
• Contractual or special rights require others keep their agreements

8. Contractual Rights and Duties
• Created by specific agreements and conferred only on the parties involved.
• Require publicly accepted rules on what constitutes agreements and what
obligations agreements impose.
• Underlie the special rights and duties imposed by accepting a position or role in
an institution or organization.
• Require
• (1) the parties know what they are agreeing
to,
• (2) no misrepresentation,
• (3) no duress or coercion,
• (4) no agreement to an immoral act.

9. Kant and Moral Rights
• Individuals generally must be left equally free to pursue their interests.
• Moral rights identify the specific interests individuals should be entitled to freely
pursue.
• An interest is important enough to raise to be a right if:
• we would not be willing to have everyone deprived of the freedom to pursue that
interest
• the freedom to pursue that interest is needed to live as free and rational beings.

10. Kant’s Categorical Imperative (First
Version)
• We must act only on reasons we would be willing to have anyone in a similar situation act
on.
• Requires universalizability and reversibility.
• Similar to questions:
• “What if everyone did that?”
• “How would you like it if someone did that to you?”

11. Kant’s Categorical Imperative (Second
Version)
• Never use people only as a means to your ends, but always treat them
as they freely and rationally consent to be treated and help them
pursue their freely and rationally chosen ends.
• Based on the idea that humans have a dignity that makes them
different from mere objects.
• It is, according to Kant, equivalent to the first formulation.

12. Criticisms of Kant
1. Both versions of the categorical imperative are unclear.
2. Rights can conflict and Kant’s theory cannot resolve such conflicts.
3. Kant’s theory implies moral judgments that are mistaken.

13. Libertarian Philosophy
1. Freedom from human constraint is necessarily good and that all constraints imposed by
others are necessarily evil except when needed to prevent the imposition of greater human
constraints.
2. Robert Nozick’s Libertarian Philosophy:
• the only moral right is the negative right to freedom
• the right to freedom requires private property, freedom of contract, free markets, and the
elimination of taxes to pay for social welfare programs

14. Types of Justice
 Distributive Justice
requires the just distribution of benefits and burdens.
 Retributive Justice
requires the just imposition of punishments and penalties.
 Compensatory Justice
requires just compensation for wrongs or injuries.

15. Principles of Distributive Justice
 Fundamental –
distribute benefits and burdens equally to equals and unequally to unequals
 Egalitarian –
distribute equally to everyone
 Capitalist –
distribute according to contribution
 Socialist –
distribute according to need and ability
 Libertarian –
distribute by free choices
 Rawls –
distribute by equal liberty, equal opportunity, and needs of disadvantaged.

16. Retributive and Compensatory Justice
• Retributive Justice = fairness when blaming or punishing persons for doing
wrong.
• Compensatory Justice = fairness when restoring to a person what the person lost
when he or she was wronged by someone else.

17. Ethic of Care
• Ethics need not be impartial.
• Emphasizes preserving and nurturing concrete valuable relationships.
• We should care for those dependent on and related to us.
• Because the self requires caring relationships with others, thosae relationships are
valuable and should be nurtured.

18. Objections to Care Approach in Ethics
• An ethic of care can degenerate into favoritism. – Response: conflicting
moral demands are an inherent characteristic of moral choices
• An ethic of care can lead to “burnout”. – Response: adequate understanding
of ethic of care will acknowledge the need of the caregiver to care for him
or herself.

19. Theories of Moral Virtue
• Aristotle – virtues are habits that enable a person to live according to reason by habitually
choosing the mean between extremes in actions and emotions
• Aquinas – virtues are habits that enable a person to live reasonably in this world and be
united with God in the next
• MacIntyre – virtues are dispositions that enable a person to achieve the good at which human
“practices” aim
• Pincoffs – virtues are dispositions we use when choosing between persons or potential future
selves

20. Objections to Virtue Theories
• It is inconsistent with psychology which showed that behavior is determined by
the external situation, not moral character. – Response: moral character
determines behavior in a person’s familiar environment. – Response: recent
psychology shows behavior is determined by one’s moral identity

21. Unconscious vs. Conscious Moral
Decisions
• Unconscious Moral Decisions – Comprise most of our moral decisions. – Made by
the brain’s “X-system” using stored prototypes to automatically and
unconsciously identify what it perceives and what it should do.
• Conscious Moral Decisions – Is used in new, strange, or unusual situations for
which the brain has no matching prototypes. – Consists of the conscious, logical
but slow processes of the brain’s “C-system”. – Evaluates reasonableness of our
intuitions, cultural beliefs, and the norms stored in our prototypes.